I write about stock markets, art markets, millennials and their money. Before joining the markets and personal finance desk I produced the investing section of Forbes.com. In that role I helped our illustrious team of contributors make the most of our site.

Not long ago, I graduated from the University of Pennsylvania where I majored in English and minored in art history but mostly worked at the student newspaper – The Daily Pennsylvanian. At the DP I served as managing editor and later explored art, journalism and other ways we express ourselves in a weekly opinion column. You can follow me on Twitter @SamSharf and email me at ssharf@forbes.com.

Simple CEO On How A Bank Can Be A Brand You Love

Simple co-founders Shamir Karkal, CFO, and Josh Reich, CEO, are not your grandfather's bankers. Reich will be a panelist at FORBES Under 30 Summit in Philadelphia this October joining LearnVest CEO/founder Alexa von Tobel and Betterment CEO/founder Jon Stein in a conversation about "How You Will Manage Your Future Millions." (Image courtesy Simple)

Five years ago this summer Josh Reich emailed his buddy Shamir Karkal with a strange question: Do you want to start a retail bank? Karkal’s answer was even more bizarre: He said yes. Today, they are the co-founders of online bank Simple, as well as its CEO and CFO respectively.

Reich will join FORBES at our Under 30 Summit in Philadelphia next month in a discussion with other entrepreneurs about why financial services are ripe for some youthful disruption. At 35 years-old, with deep backgrounds in technology, these Carnegie Mellon MBAs are not your typical bank execs. This is appropriate because Simple is not your grandfather’s bank. Their bank has no physical branches. They don’t charge overdraft fees. And they won’t send you books of 500 checks. (Really, what are you going to do with 500 checks?)

Simple does give its clients access to 55,000 free ATMs. Its smart phone app makes over drafting nearly impossible because it tells you how much money you have available to spend in real time. And if you need a check they’ll print and send it to your old-fashioned payee free of charge. In 2013 Simple processed more than $1.7 billion worth of transactions and currently has about 120,000 customers, average age 28 to 29. In February Simple was acquired by Spanish Bank BBVA for $117 million.

“We wanted to build this modern lifestyle brand that relies on new technology to help customers feel more at ease with what is going on with their money,” says Reich.

(Image courtesy Simple)

As he got Simple off the ground Reich started asking himself: Do people trust banks? What does trust even look like in financial services? He soon found his answers: No. And no one knows, because a trustworthy bank for the modern age didn’t yet exist.

According to ViacomViacom unit Scratch 71% of Millennials – currently ages 18 to 34 – would rather go to the dentist than listen to a bank. Most promising for Simple? One in three Millennials say they are open to changing banks in the next 90 days.

“The financial crisis taught people they could trust their bank as far as FDIC insurance was concerned — if you put some money in the bank today, it will be there tomorrow,” says Reich. But, he says, people don’t believe big banks have their best interest in mind, arguing that traditional banks make most of their money by keeping customers confused.

Like many financial tech entrepreneurs Reich sees himself as customer #1 and Simple as the answer to his long held frustration. A native Aussie, Reich moved to the United States in 2004 to get his MBA. His financial situation was no different than it had been back home yet Reich was suddenly very aware of his bank and calls his relationship with it “adversarial.” He was not able to pay many of his bills online and was charged overdraft fees when ChaseChase duplicated transactions. Broadly, it felt impossible to figure out what was actually going on with his money.

“America is this country where we are known for technological innovation, we have a huge financial services industry yet none of that innovation really went to drive forward customer experience,” says Reich. “I didn’t really have a background in banking but it was pretty clear as a consumer that there were a lot of problems to be solved.” In addition to his MBA, Reich has a bachelor’s degree in math from the University of Melbourne and “most of a medical degree.” Prior to simple he worked a data mining consulting firm and led a group of quants at a $10 billion hedge fund.

Simple is not a full service bank. They only offer one type of account, can’t underwrite a mortgage and don’t offer some of the perks people do like from big banks such as cash back. The products they do provide harness cutting edge technology and design to rethink the way people and banks interact. Instead of an account balance a Simple user has a Safe-to-Spend amount– total assets held with Simple, minus upcoming bill payments, pending transaction and Goals. Instead of a funding a blanket savings account Simple users set up Goals and the system automatically puts away a little bit of money every day toward those specific items or expenses. Simple users have a 30% savings rate, versus a 5% industry average and swipe their Simple VisaVisa debit cards 24 times a month on average versus a 17 swipe industry average.

(Image courtesy Simple)

The most innovative aspect of Simple is that aims to be not just a place to hold your money but also a platform to help you control it. Simple incorporates tools similar to those offered by personal finance management sites/apps like Mint, LearnVest and Level. The difference here is a user is acting directly on her money, so she doesn’t need to separately log in to set up transfers to her savings account or automatic bill pay as these site often recommend. Users cannot, however, link credit cards or other bank accounts to the Simple platform for monitoring, in a world where a person with a credit card has 6.8 on average this limitation makes it unlikely anyone is getting a full financial snapshot through Simple alone.

“We believe that everyone wants the same things,” says Reich. “They want to maximize the interest they earn on money they have, minimize the interest the pay on money they are borrowing and avoid fees. We try to build a product that does that for everyone.”

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